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By Corey Paul

Umpqua Bank opened its newest location today on SE Hawthorne Boulevard, a branch styled as a folksy hangout to further the bank's goal of embedding in Portland neighborhoods. This is the first of five "stores" that Umpqua plans to build through 2011, an expansion by 25% within the metro area for Oregon's dominant regional bank.

Inside the new Hawthorne branch, customers can enjoy coffee and tea and use free wireless Internet. A digital screen similar to a giant iPad displays neighborhood statistics and highlights events at the bank and local merchants.

Umpqua had seven store-styled branches before Hawthorne and had its eye on opening more in main Portland locations for years before this year presented a favorable real-estate price, says Lani Hayward, executive vice president of creative strategies.

"We like being in them because there is obviously a good mix of the residential — people that are passionate about their neighborhood — and the small businesses that support it," Hayward says.

Startup costs for the neighborhood store models are about half the cost of their more common "New Generation" branches, such as the branch in Portland's Pearl District. They're smaller too: about 1,800 square feet compared to 3,000.

Umpqua can can launch a store-style branch in about 45 days after receiving the necessary permits. The profits typically roll in within a year.

The guinea pig of the small-store concept dates back to 1995 in Umpqua's hometown of Roseburg. Workers there decided to re-imagine the branch as a retail store and discourage the idea of banking as a chore.

Though it favors a small-town boutique aesthetic, Umpqua, on balance, has become huge by regional bank standards. Today's opening marked its 184th location in four states. Umpqua's total assets are about $12 billion, and it eclipsed JP Morgan Chase this year as the fourth-largest bank in Oregon by deposits. The bank employs more than 2,000 people.

Earlier this year, Umpqua acquired two failed banks in Washington. It announced that it would refurbish 19 branches while building six new ones. Hayward pointed to one of the first of those new banks on Seattle's Capitol Hill as an example of the early success Umpqua sees introducing its community-friendly approach. Within four days of opening that branch on Dec. 8, the bank saw $500,000 in deposits.

"We always see the deposits and the retention goes up after those acquisitions occur," Hayward says. "So that tells us it is working and working quickly."